Financial Crime World

Ecuador’s Banking System Takes Steps to Counter Financial Crimes

The financial sector in Ecuador has made significant strides in implementing measures to combat money laundering and terrorist financing, according to the latest ratings from a global watchdog.

Progress Made

Ecuador scored high on several fronts, including:

  • Customer Due Diligence: The country has implemented robust procedures for verifying customer identities, assessing risk, and conducting regular reviews.
  • Record-Keeping: Ecuador’s financial institutions maintain accurate and detailed records of all transactions, ensuring effective monitoring and investigation.
  • Internal Controls: Financial institutions have established strong internal controls to prevent money laundering and terrorist financing.

Praise for Regulatory Efforts

Ecuador has also received praise for its efforts to:

  • Regulate and Supervise Financial Institutions: The country’s regulatory bodies have implemented effective supervision measures, ensuring that financial institutions comply with AML/CFT regulations.
  • Supervisors’ Powers: Ecuador’s supervisors have been granted sufficient powers to investigate and take action against non-compliant financial institutions.

Areas for Improvement

While Ecuador has made significant progress, there are areas where the country needs to improve:

  • Confiscation and Provisional Measures: Ecuador’s confiscation and provisional measures are not effective in tackling money laundering and terrorist financing.
  • Terrorist Financing Offenses: The country lacks sufficient legislation to effectively prosecute terrorist financing offenses.
  • Transparency and Beneficial Ownership: Ecuador’s regulations on transparency and beneficial ownership of legal persons and arrangements are insufficient.

Recommendations

To further strengthen its AML/CFT regime, Ecuador is recommended to:

  • Enhance Confiscation and Provisional Measures: Improve confiscation and provisional measures to effectively tackle money laundering and terrorist financing.
  • Implement Effective Transparency and Beneficial Ownership Regulations: Strengthen regulations on transparency and beneficial ownership of legal persons and arrangements.
  • Improve Supervision and Regulation of Non-Profit Organizations and DNFBPs: Enhance supervision and regulation of non-profit organizations and designated non-financial businesses and professions (DNFBPs).

By addressing these areas, Ecuador can further strengthen its AML/CFT regime and contribute to a safer and more secure financial system.